EFFECTS OF INSTITUTIONS ON ENTREPRENEURS' TRUST AND ENGAGEMENT IN CROWDFUNDING

Crowdfunding offers an innovative financing tool for entrepreneurs to facilitate capital access when they start and scale new businesses. The global crowdfunding market grows at an accelerated rate along with the evolving environment, which consists of different institutions and structures that arise to impact entrepreneurial activities. The aim of this study is to understand the effects of dimensions of institutions -including regulatory, cognitive, and normative- on entrepreneurs' trust and engagement in crowdfunding. We also provide empirical evidence of how engagement in a crowdfunding community affects satisfaction and WOM behavior. We first conducted a qualitative research including in-depth interviews with entrepreneurs and crowdfunding industry experts in Turkey to gain insights about this unexplored subject. We then collected data in a quantitative study from 360 entrepreneurs to test the proposed research model. The results showed that cognitive and normative dimensions of institutions had impacts on entrepreneurs' perceptions and behaviors. The results of this study have implications for the theoretical development of the crowdfunding research and managerial practices.